The Quality of Corporate Social Responsibility Information Disclosure and Enterprise Innovation: Evidence from Chinese Listed Companies

Round 1

Reviewer 1 Report

This is an interesting study and very well thought-out. I enjoyed reading the paper in that I have interest in the topic. Overall, this is a good effort on the part of the author. The analyses are good, and the methodology is good. I have some minor comments to further improve the paper as it stands. I will list my comments below and they are not in any order per se.

1. Please revisit Tables 3, 4, 5, 6, 7, and 8 and add/include the R-square. You do have the Adjusted R-square, but it will be nice to add/include the R-square as well.

2. In the introduction, you must highlight the rationale/impetus that gave rise to your paper. Basically, why is your study important? You do have some narrative on page 4, but it is not vigorous enough. Also, please state the purpose and aim of this paper upfront before your hypotheses.

3. I am surprised you did not come across Panda, D'Souza, and Blankson's (2018) work in India in TIBR. Also, see Liu et al.'s (2019) work on the topic in China.

 

Author Response

Thank you for your professional and valuable advice, on the basis of which I have made the following changes to this article:

 

1. Please revisit Tables 3, 4, 5, 6, 7, and 8 and add/include the R-square. You do have the Adjusted R-square, but it will be nice to add/include the R-square as well.

thanks for your suggestion, referring to previous research paradigms, I have reported the R-square in all tables in the text and used it as a replacement for the adj R-square. in this paper, the difference between the R-square and the adj R-square is not significant

 

2. In the introduction, you must highlight the rationale/impetus that gave rise to your paper. Basically, why is your study important? You do have some narrative on page 4, but it is not vigorous enough. Also, please state the purpose and aim of this paper upfront before your hypotheses.

First，I have simplified and transferred the introduction to the background of CSR policy to the next section of the literature review, and have used this to introduce part of the motivation and rationale for writing this paper: i.e.. . , although scholars have studied the mandatory CSR information disclosure policy enacted by the Chinese government in 2008 and found that mandatory CSR information disclosure has a positive impact on corporate innovation performance. However, the policy was actually implemented in 2008 to include only over 200 well-governed listed companies, while with the further implementation and improvement of the relevant policy, nearly 4,000 listed companies have disclosed CSR information in 2020. As shown in Figure 1, the number of A-share listed companies publishing independent CSR reports has risen from 511 in 2009 to 3,861 in 2020, according to RSK Global Responsibility Assessment.

 

Second，Our main literature for comparative writing is Zhang (2022 ) and Chen et al. (2018) on CSR policies in China, and Rajgopal and Tantri (2022) on CSR policies in India.

 

While on the one hand relative to Chen et al. (2018) and Rajgopal and Tantri (2022) who find a negative impact of CSR disclosure on corporate performance and stock prices, which are both related to the short-term economic effects of the firm. This paper focuses mainly on examining whether CSR disclosure has a catalytic effect on innovation, which better highlights the core objective of CSR: i.e. the impact of CSR on long-term corporate development.

 

On the other hand, by comparing with Zhang (2022) on the impact of the short-term shock of China's mandatory CSR disclosure policy in 2008 on firms' innovation performance in the next two years, this study quantifies the quality of firms' CSR information and includes a richer sample of firms with a longer new span (we include a total sample of over 3,000 firms from 2009 to 2020), thus making this study more representative and better able to capture the long-term impact of CSR information disclosure on firms.

 

These are the aims and motivations that I have added to the writing of this paper, as seen in lines 120-130 on page 3 and lines 144-157 on page 4

3. I am surprised you did not come across Panda, D'Souza, and Blankson's (2018) work in India in TIBR. Also, see Liu et al.'s (2019) work on the topic in China

thanks to your suggestions, I have carefully read panda's (2019) article on research based on Indian data and have benefited from it. I strongly agree with panda's (2019) argument that different countries and regions may respond to CSR policies very differently due to their cultural backgrounds. I have also cited this argument in the text to complement the motivation for our study.

 

 

References

 

1. Panda, S.; D'Souza, D. E.; Blankson, C. Corporate social responsibility in emerging economies: Investigating firm behavior in the Indian context Thunderbird International Business Review, 2019, 61, 267-276.
2. Rajgopal, S.; Tantri, P. Does a Government Mandate Crowd Out Voluntary Corporate Social Responsibility? Evidence from India Journal of Accounting Research, 2022.
3. Chen, Y.C.; Hung, M.; Wang, Y. The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China. J. Journal of accounting and economics, 2018, 65, 169-190.
4. Zhang, H. Mandatory corporate social responsibility disclosure and firm innovation: Evidence from a quasi-natural experiment. J. Finance Research Letters, 2022, 47, 102819.

 

Reviewer 2 Report

Comments for author File: Comments.pdf

Author Response

Thank you for your professional and valuable advice, on the basis of which I have made the following changes to this article:

 

1. Abstract is too long. Suggest shortening the abstract and reporting only the salient information.

I have simplified the abstract by removing the previously excessive presentation of the policy and Chinese economic context and highlighting the findings of the paper, as well as the results of the tests of specific impact mechanisms and transmission channels. In addition, the heterogeneity analysis has also been removed from the abstract, considering that it also serves as a supplementary validation of the mechanism tests.

The revised abstract is as follows:

Abstract: The Chinese government has implemented a series of corporate social responsibility (CSR)-related policies in recent years, aiming to achieve high-quality economic development and transformation. To assess the effectiveness of these CSR policies, this study empirically explores the relationship between the quality of CSR information disclosure and corporate innovation performance using data from A-share listed companies in Shanghai and Shenzhen, China, from 2009 to 2020. The results show that: (1) Improvement in the quality of CSR information can significantly improve corporate innovation performance. (2) Further analysis reveals that the improvement of CSR information quality not only helps to reduce the agency costs and alleviate the financing constraints of enterprises, but also reduces the cost of external interpretation of corporate innovation projects and conveys a good corporate image by attracting the attention of analysts and the media, which all contribute to the improvement of corporate innovation performance. This study further refines the mechanism of the impact of CSR disclosure on firms' innovation performance, which may provide guidance to governments in developing and improving CSR disclosure systems in the future.

 

2. Some of the information (line 51 to line 76) contained in “Introduction” does not seem appropriate. Suggest moving this part to a new subsection in Section 2.

I have simplified and transferred the introduction to the background of CSR policy to the next section of the literature review, and have used this to introduce part of the motivation and rationale for writing this paper: i.e.. . , although scholars have studied the mandatory CSR information disclosure policy enacted by the Chinese government in 2008 and found that mandatory CSR information disclosure has a positive impact on corporate innovation performance. However, the policy was actually implemented in 2008 to include only over 200 well-governed listed companies, while with the further implementation and improvement of the relevant policy, nearly 4,000 listed companies have disclosed CSR information in 2020. As shown in Figure 1, the number of A-share listed companies publishing independent CSR reports has risen from 511 in 2009 to 3,861 in 2020, according to RSK Global Responsibility Assessment.

 

3. Suggest comparing this research results with the ones of another related research.

Our main literature for comparative writing is Zhang (2022 ) and Chen et al. (2018) on CSR policies in China, and Rajgopal and Tantri (2022) on CSR policies in India.

 

While on the one hand relative to Chen et al. (2018) and Rajgopal and Tantri (2022) who find a negative impact of CSR disclosure on corporate performance and stock prices, this paper focuses mainly on examining whether CSR disclosure has a catalytic effect on innovation, which better highlights the core objective of CSR: i.e. the impact of CSR on long-term corporate development.

 

On the other hand, by comparing with Zhang (2022) on the impact of the short-term shock of China's mandatory CSR disclosure policy in 2008 on firms' innovation performance in the next two years, this study quantifies the quality of firms' CSR information and includes a richer sample of firms with a longer new span (we include a total sample of over 3,000 firms from 2009 to 2020), thus making this study more representative and better able to capture the long-term impact of CSR information disclosure on firms.

 

4. Basic assumptions of linear regression analysis ((1)-(6)) should be addressed including multicollinearity of dependent variables.

The Pearson correlation coefficient treatment between variables was added to prevent the interference of multicollinearity between variables with the results of this paper: the specific results can be seen below.

 

Table 3 shows that there is no serious problem of multicollinearity in this paper's models, as none of the coefficients has an absolute value greater than 0.9, except for the correlation coefficients of the dependent variables PA1 and PA2.

Table 3. The correlation matrix.

Variable	PA1	PA2	Ac	Dc	Analyst	Media	CSRscore	Size	Age	Roa
PA1	1
PA2	0.915***	1
Ac	0.133***	0.138***	1
Dc	-0.071***	-0.087***	-0.084***	1
Analyst	0.002	0.009	-0.024***	-0.002	1
Media	0.198***	0.199***	0.130***	-0.095***	-0.050***	1
CSRscore	0.114***	0.119***	0.114***	-0.048***	-0.009	0.363***	1
Size	0.271***	0.277***	0.163***	-0.336***	-0.041***	0.323***	0.490***	1
Age	0.180***	0.171***	0.082***	-0.006	0.003	0.086***	-0.069***	0.031***	1
Roa	0.064***	0.068***	0.046***	-0.151***	-0.119***	0.352***	0.071***	-0.035***	-0.062***	1
Growth	0.035***	0.035***	-0.014*	-0.134***	0.020***	0.101***	0.031***	0.051***	0.015**	0.242***
Lev	0.055***	0.066***	0.040***	-0.252***	0.069***	0.015*	0.240***	0.527***	-0.061***	-0.382***
Top1	0.003	0.020***	0.027***	-0.154***	-0.079***	0.048***	0.114***	0.221***	-0.070***	0.131***
Cash	-0.055***	-0.063***	-0.036***	0.141***	-0.125***	0.072***	-0.013*	-0.229***	-0.085***	0.293***
TQ	-0.112***	-0.110***	-0.031***	0.363***	0.029***	0.098***	0.048***	-0.424***	0.048***	0.144***
	Growth	Lev	Top1	Cash	TQ
Growth	1
Lev	0.030***	1
Top1	-0.005	0.056***	1
Cash	0.012*	-0.373***	0.041***	1
TQ	-0.002	-0.285***	-0.120***	0.184***	1

 Note: ***, **, and * indicate significance at the 1%, 5%, and 10% levels, respectively.

 

 

References

 

1. Panda, S.; D'Souza, D. E.; Blankson, C. Corporate social responsibility in emerging economies: Investigating firm behavior in the Indian context Thunderbird International Business Review, 2019, 61, 267-276.
2. Rajgopal, S.; Tantri, P. Does a Government Mandate Crowd Out Voluntary Corporate Social Responsibility? Evidence from India Journal of Accounting Research, 2022.
3. Chen, Y.C.; Hung, M.; Wang, Y. The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China. J. Journal of accounting and economics, 2018, 65, 169-190.
4. Zhang, H. Mandatory corporate social responsibility disclosure and firm innovation: Evidence from a quasi-natural experiment. J. Finance Research Letters, 2022, 47, 102819.

 

Author Response File: Author Response.docx